German trade body warns of huge supply chain disruption over Omicron

BERLIN (Reuters) – Germany’s BGA trade association warned on Wednesday of massive supply chain disruptions due to the rapid spread of the highly infectious Omicron variant of the coronarvirus, but said a long-term collapse of the supply chains was unlikely.

German industry has been hit by supply shortages of microchips and other components, while rising coronavirus cases are clouding the outlook for retailers at the start of 2022.

“There is no risk of collapse, but of a massive disruption of the supply chain – at least temporarily,” BGA President Dirk Jandura was quoted by Funke newspaper group as saying.

Although many wholesalers around the world have made their supply chains more flexible, disruptions in global delivery networks might still occur, he said.

“You cannot fully cover yourself against a global pandemic,” Jandura said, calling for government support through lower energy and electricity prices and other forms of help.

Omicron now accounts for more than 44% of coronavirus infections in Germany, the Robert Koch Institute (RKI) for infectious disease has said. Germany reported 45,690 cases on Tuesday, 49.5% more than on the same day a week ago.

Concerns that the new variant could bring critical services to a halt prompted the German government to tighten the rules for restaurant and bar visits and to shorten COVID-19 quarantine periods.

Germany’s Chamber of Commerce (DIHK) welcomed the new isolation regulations but said it was concerned about a growing number of infections in the logistics sector, which is already suffering from staff shortages, and warned of consequences for food retail and medical production sectors.

(Reporting by Riham Alkousaa, Editing by Victoria Waldersee and Gareth Jones)